- The use of materials which have existing uses (in the absence of biofuels/bioenergy usage) is likely to create negative indirect greenhouse gas effects (i.e. create additional emissions which are not currently accounted for in the carbon reporting methodologies for the RTFO or the RED). Alternatively, the use of materials which are disposed of (in the absence of biofuel/bioenergy usage) can create large positive greenhouse gas effects (i.e. create a reduction in emissions which is not accounted for in current carbon reporting approaches).
- Different levels of certainty will be achieved in quantifying the indirect GHG effect for different feedstock materials. The certainty of the assessment will depend on a number of factors: the number of existing uses/disposal pathways, the complexity of the markets in which the material is traded, the number of possible substitutes/alternative production systems for the material, the range of possible emissions factors for the substitutes/alternative products/existing disposal pathways, and the availability of data for these factors. The assessment for some materials may therefore be highly uncertain, while for other materials a higher level of certainty can be achieved.
- Understanding the uncertainty in the assessment of indirect GHG effects is important for interpreting and using the output results. Although there may be low certainty for any point estimate, the findings from an assessment may still allow a clear conclusion if all the outcomes from the assessment show the same directional result (e.g. all outcomes show a negative and significant indirect effect, although the range of possible outcomes is large).
- The findings for UK tallow show a large range of possible indirect effects (between 0.89 tCO2e/tonne of tallow used to 3.03 tCO2e/tonne of tallow used), however all the outcomes are negative. The graph below shows the lower, upper and central estimate figures for the indirect effects for using tallow for biodiesel production, applied to the Renewable Fuels Agency’s default value for tallow methyl ester biodiesel. In the lower bound case, the net (direct and indirect) emissions show a carbon savings of 56% relative to fossil diesel; in the upper bound case there is a net increase in emissions of 13%.
- The indirect GHG effect from the use of MSW is relatively certain, and also positive, in comparison with the other materials studied. The indirect impact of switching 1 tonne of residual MSW away from landfill is calculated as 0.5 tCO2e. For other forms of MSW the figures are 0.78 tCO2e for garden waste, 0.97 tCO2e for paper and 0.5 tCO2e for food waste. The graph below shows the indirect effect for residual MSW switching away from landfill applied to the Renewable Fuels Agency’s default value for biogas from UK MSW. The fossil fuel comparator used is fossil diesel. The net emissions show a carbon savings of 193% relative to fossil diesel.
- The UK wheat straw case study shows a range of possible indirect effects (between 0.002 tCO2e/tonne to 0.038 tCO2e/tonne of wheat straw used for biofuels/bioenergy), dependent on the substitutions and data used. It should be noted that none of the possible outcomes show a large indirect effect. Applying a “most likely” scenario, the indirect effect is estimated to be 0.0074 tCO2e/tonne of wheat straw used. Applying this indirect effect value to a direct emissions figure for lignocellulosic bioethanol reduces the net greenhouse gas savings from 81% to an 80% saving (relative to gasoline).
- The case study for European sugar beet molasses also shows a range of possible indirect effects (from 0.1 to 0.4 tCO2e per tonne of molasses used for biofuels/bioenergy), dependent on the substitutions and assumptions used. These figures equate to an indirect effect of 18 to 75 gCO2e/MJ ethanol. Applying these values to the Renewable Fuels Agency default fuel chain for UK beet molasses results in a net change in greenhouse gas emissions of -32% to +35% (relative to gasoline).
- Indirect GHG effects are determined by the existing uses (or disposal pathways) for the material, the possible substitutes/alternative products switched to, and the emissions resulting from the production of those substitutes/alternative products (or change in emissions from waste disposal). Therefore the indirect GHG effect may be different in 7 different localities, regions and countries, depending on these determining characteristics. For example, the current use of tallow in the US is significantly different from current tallow use in the UK, and therefore the indirect effects of using US tallow for biofuel/bioenergy may be significantly different from the use of UK tallow.
- There are a number of practical and methodological challenges with using indirect GHG effect factors within life-cycle carbon reporting requirements: 1. Temporal changes: indirect effects will change over time if any of the determining factors change (e.g. the existing uses/disposal pathways for the material, the substitute materials used, changes in substitution costs due to changes in other policy mechanisms, such as the introduction of the Renewable Heat Incentive etc). If indirect effect factors are included within carbon reporting requirements the factors may need to be updated regularly to account for changes over time. This changeability raises issues for investor confidence. 2. Locational variation: as noted above, indirect effects may be different in different localities, regions and countries. If indirect effect factors are included within lifecycle carbon reporting requirements then geographically specific factors would be required. For materials which have different existing uses or disposal pathways in different localities, facility or locality specific indirect effect factors may be required. This raises cost and practicality issues for implementing indirect effect factors within fuel chain-level carbon reporting. 3. Uncertainty: the magnitude of indirect effects, and any point estimate, may be highly uncertain. This presents difficulties for selecting single indirect effect figures to include within life-cycle carbon reporting requirements. 4. Circular effects in the analysis: circular effects may arise when the alternative uses of the material studied are themselves biofuel/bioenergy applications which may also be assessed for their indirect effects. This problem may be addressed by identifying a baseline non-energy alternative use, or by undertaking a net calculation for the indirect effects of the different competing energy applications. However, such methodological steps add to the complexity and uncertainty of quantifying indirect effects.
- Although there are a number of difficulties in operationalising indirect GHG effect factors within life-cycle carbon reporting this does not entail that indirect GHG effects are insignificant or should not be taken into consideration in biofuel/bioenergy support mechanisms.
- The Renewable Energy Directive will create double incentives for biofuels made from “wastes” and “residues”. This is understood to have been included on the assumption that such fuels would lead to additional environmental benefits compared with crop based feedstocks. If this policy objective is to be realised, this study illustrates that it is important that the definitions of “wastes” and “residues” are qualified to ensure only materials which 8 can be expected to create a significant net positive GHG saving receive double incentives. There are a number of possible options for ensuring only “appropriate” wastes and residues receive double incentives: 1. A case-by-case assessment of feedstock materials, with a positive list of “appropriate” materials provided in ordinance. 2. A “rule-of-thumb” approach: all materials which are disposed of in the absence of biofuel/bioenergy usage may be considered “appropriate”. However, it should be noted that this simplified approach may be subject to exceptions, and may incentivise the use of materials which will create negative indirect effects (e.g. if using recyclable materials, which would otherwise displace primary production processes).
- The methodology for quantifying indirect GHG effects is equally applicable to materials used for biofuels, bioheat, or biopower. However, in order to fully utilise an indirect GHG effects factor it is necessary have a broader carbon reporting framework in which to use the figure. The Renewable Energy Directive requires carbon life-cycle reporting for biofuels and bioliquids, but not for bioheat and biopower.
- There may be a number of possible positive actions which biofuel/bioenergy producers can undertake to limit or mitigate their negative indirect GHG effects, e.g. sourcing materials from countries/regions where the material has low levels of utilisation or has low-carbon substitutes; increasing the efficient use of the material to free a proportion for biofuel/bioenergy applications; entering into agreements with existing users of the material to promote the use of low-carbon substitutes/alternatives. Comparable mitigation measures are currently being explored for indirect land use change.
Last Modified: 16 Dec 2009